Busted! 5 Myths Related to Tax Filing

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Attention, US tax filers! It’s time for you to gear up for April 17th, for it’s less than a month away. As the deadline inches closer, there’s little room for error. With the introduction of The Tax Cuts and Jobs Act, filing tax seems much more confusing now. During this tasking time, it’s important that you keep a clear head. Don’t believe any and all information you see. We’re here to bust a few tax-related myths so you can file error-free.

1. Myth: File as late as possible to have more time to streamline the process.

Truth:

Even though it isn’t set in stone that you must file early, it’s always a useful practice. Some people would like you to believe that taking more time to file will keep you more relaxed. But in truth, it’s only a hassle. A smart way of approaching tax-filing is to set aside a few hours for it on just one day. That helps you concentrate better. Further, filing early can also get you early refunds.

2. Myth: Call up the IRS/Order a tax transcript for faster refunds.

Truth:

Let’s just say it – there is no way to speed up your refunds. You can call up your tax professional or even the IRS but to no avail. Further, getting a transcript also isn’t a secret trick. Transcripts are only useful when applying for a mortgage, student loan or small business loan. However, you can check “Where’s My Refund?” on www.irs.gov to track your refund payment.

3. Myth: You don’t have to file a return if you don’t owe taxes.

Truth:

The U.S tax code contains provisions which can eliminate an expat’s tax obligation towards the U.S. This is done to avoid double taxations of income earned by those U.S. citizens who’re living abroad. Further, expats are also often allowed to use foreign taxes paid as a credit against their U.S. tax obligation. However, even if your obligations are eliminated by these provisions, you must file returns annually.

4. Myth: The 2017 tax reform has eliminated all deductions.

Truth: Yes, the tax reform has brought in a lot of changes, but those won’t be applicable till 2018. Don’t assume that all deductions have been eliminated or you might end up paying more than you owe. If you itemized deductions in 2016, you still might be able to itemize them on the 2017 return. The new tax law will apply a limit of $10,000 on the maximum deduction for all state and local taxes combined. But the 2017 returns do not have this limit. Additionally, the standard deduction will nearly double under the new tax law, but that also won’t come in place until 2018.

5. Myth: If you don’t live in the U.S., you don’t have to file U.S. taxes.

Truth:Most countries don’t tax citizens who are not living in said countries. However, one can’t enjoy that if they’re from the U.S. In fact, the United States of America is one of the few countries that taxes its citizens even if they have taken up residence in a different country. That should help you file taxes with some more clarity. If you still have questions, approach a robust tax filing service to make it all easier. MyTaxFiler provides a free 30-minute consultation. Email us at tax@mytaxfiler.com today.